Shares of IDT Corporation (IDT Quick QuoteIDT - Free Report) have lost 2.1% since the company reported its earnings for the quarter ended Oct. 31, 2025. This compares to the S&P 500 Index’s 0.2% loss over the same time frame. Over the past month, the stock lost 6.3% against the S&P 500’s 0.4% rise.

IDT’s Earnings Snapshot

IDT posted solid first-quarter fiscal 2026 results, with revenue rising 4.3% year over year to $322.8 million from $309.6 million. Income from operations climbed 30.8% to $30.9 million from $23.6 million. Net income attributable to IDT increased 29.6% to $22.4 million from $17.2 million, while GAAP earnings per share (EPS) improved 30.9% to $0.89 from $0.68 a year ago. On a non-GAAP basis, diluted EPS advanced 32.4% to $0.94 from $0.71.

Profitability strengthened as gross profit climbed 9.8% to $118.2 million from $107.6 million, and gross margin expanded 180 basis points to 36.6% from 34.8%. Adjusted EBITDA increased 26% to $37.9 million from $30 million.

IDT’s Performance by Segment

National Retail Solutions (NRS): NRS posted another strong quarter, reflecting robust merchant adoption and higher usage trends. Total revenue increased 22% year over year to $37.1 million from $30.4 million, with recurring revenue reaching $35.3 million from $28.9 million, up 22%. Merchant Services revenue surged 38%, SaaS Fees grew 30%, while Advertising & Data fell 15%, partly due to lower industrywide CPMs. Gross profit rose 21% to $33.5 million from $27.6 million, and income from operations jumped 35% to $8.9 million from $6.6 million. Adjusted EBITDA increased 33% to $10.3 million from $7.7 million. NRS also saw active POS terminals expand by 4,800 year over year to 37,900 from 33,100, while the monthly average recurring revenue per terminal rose 6% to $313 from $295.

Fintech (including BOSS Money): Fintech delivered some of the quarter’s strongest gains. Total segment revenue grew 15% to $42.7 million from $37.1 million, led by a 20% rise in digital channel revenue. Digital send volume increased 34% year over year, reflecting higher transactions and greater average dollars remitted. Income from operations rose 97% to $6.4 million from $3.2 million, and adjusted EBITDA surged 87% to $7.5 million from $4 million. Average revenue per transaction declined 4%, but overall profitability improved due to reduced chargebacks, lower payout commissions and improved operational efficiency.

net2phone: Subscription revenue increased 10% to $23.0 million from $21 million, supported by a 7% rise in seats to 432,000 from 406,000 and growing demand for higher-value CCaaS seats. Income from operations leapt 94% to $1.9 million from $1 million, and adjusted EBITDA rose 44% to $3.6 million from $2.5 million despite increased investment in AI product development. net2phone recorded its first sales of its AI agent during the quarter and launched its Coach AI solution near the period’s end.

Traditional Communications: This segment saw revenue decline of 0.5% to $219.5 million from $220.5 million, but income from operations increased 1% to $15.8 million from $15.7 million, supported by cost efficiencies. Adjusted EBITDA was up 2% to $18.9 million from $18.4 million, illustrating the segment’s consistent cash generation even as legacy voice volumes continue to decline. IDT Digital Payments and IDT Global performed well, with the Zendit B2B platform growing revenue by more than 90% year over year.

IDT’s Other Key Business Metrics

Digital channels continued to provide significant leverage to IDT’s growth strategies. BOSS Money’s digital transactions accounted for 84% of total transactions and grew 22% year over year. At NRS, delivery-integration initiatives with DoorDash and Grubhub helped boost order volume for participating retailers. The company also reported steady growth in payment processing accounts, which rose by 4,600 year over year.

IDT’s Management Commentary

Management emphasized the growing importance of IDT’s three higher-margin growth segments (NRS, Fintech, net2phone) in lifting consolidated profitability. The CEO cited continued rollout of premium NRS services — such as delivery integrations, couponing and product-data scan programs — as drivers of recurring revenue growth.

In Fintech, leadership pointed to digital outperformance versus retail, expecting the gap could widen as a federal excise tax on cash remittances begins Jan. 1, 2026. net2phone’s strategy is shifting from stand-alone products to bundled, AI-enabled solutions tailored to customer workflows, with early sales of an AI agent and the launch of Coach AI at quarter-end.

Factors Influencing IDT’s Headline Numbers

IDT’s higher gross profit and margin expansion were attributed to a mix shift toward growth segments, which carry materially higher margins than Traditional Communications. Fintech profitability gains were aided by operating leverage and lower costs, including reduced chargebacks and payout commissions, with AI and machine learning improving customer service and fraud detection economics. NRS’s Advertising & Data revenue decline was linked to broader digital ad-market CPM compression as streaming inventories expanded, though direct-channel sales supported sequential improvement.

Cash flow from operations was negative largely due to working-capital timing tied to quarter-end on a Friday, when prefunding needs for BOSS Money are typically highest. Capital spending increased 10.3% year over year to $5.8 million from $5.3 million.

IDT’s Guidance

IDT maintained its full-year fiscal 2026 adjusted EBITDA guidance of $141 million to $145 million. Management said the company is well-positioned to reach this target, implying 7%-10% growth compared with fiscal 2025, and will revisit guidance after monitoring fiscal second-quarter performance.

IDT’s Other Developments

No acquisitions, divestitures, or restructuring actions were announced for the quarter. Management noted that the Delaware Supreme Court affirmed dismissal of the Straight Path class action claims against IDT, resolving the litigation favorably.

The company also repurchased 158,000 shares for $7.6 million and declared a quarterly dividend of $0.06 per share, payable Dec. 23, 2025.